Shares of e.l.f. Beauty Inc. (NYSE: ELF) surged 22% in morning trading, following the company's impressive fourth-quarter results and a major acquisition announcement. The cosmetics company delivered a strong performance that exceeded analyst expectations and revealed plans to acquire Hailey Bieber's Rhode brand for $1 billion.

E.l.f. Beauty reported adjusted earnings per share of $0.78 for the fourth quarter, surpassing the analyst consensus of $0.72. Revenue for the quarter came in at $332.6 million, beating estimates of $327.47 million. This marks the company's 25th consecutive quarter of net sales growth and market share gains, demonstrating its consistent performance in the competitive beauty industry.

In a strategic move to expand its presence in the prestige beauty market, e.l.f. Beauty announced a definitive agreement to acquire Rhode, a fast-growing multi-category lifestyle beauty brand founded by model and influencer Hailey Bieber. The $1 billion deal includes $800 million payable at closing ($600 million in cash and $200 million in stock) and a potential additional $200 million earnout based on Rhode's growth over the next three years. This acquisition is expected to strengthen e.l.f. Beauty's position in the high-end beauty segment and leverage Bieber's influential status in the industry.

Despite the positive results and exciting acquisition news, e.l.f. Beauty refrained from providing fiscal 2026 guidance due to uncertainties surrounding import tariffs. The company also announced plans to raise prices by $1 starting in August to mitigate the effects of inflation and potential tariff impacts. These factors highlight the challenges faced by the cosmetics industry in the current economic environment.

The market's enthusiastic response to e.l.f. Beauty's announcements was further bolstered by several analyst upgrades. Notable firms such as Piper Sandler, Raymond James, and BofA Global Research raised their price targets for the stock, expressing confidence in the company's growth prospects and strategic initiatives.